Trump's tax turmoil

Last Thursday, the GOP leadership unveiled their proposal for a new, controversial tax plan titled the Tax Cuts and Jobs Act. The bill, if passed, will cut nearly $1.5 trillion in federal revenue, mostly in the form of significant tax reductions for corporations. Despite the intense debate and outrage ignited by the new tax plan, Republicans in Congress intend to preserve the plan in its basic form with an aim to pass the legislation through the White House by the end of the year. Although the main aim of the new tax code according to conservative lawmakers centers around encouraging economic growth and businesses, the actual text of the bill and the projected outcomes of its implementation tell a different story.  

Hidden within the proposed tax overhaul—a document that clocks in at over 400 pages—are several provisions that are entirely unrelated to deductions and exemptions, including a provision for a “child’s unborn rights.” This move to incorporate social policies along party lines into a piece of unrelated tax legislation is a clear attempt to embolden conservative votes for the fledgeling bill. This is particularly important for the party’s leadership given that the Republican-controlled House and Senate chambers have had extremely difficulty passing key legislation, like a repeal of the Affordable Care Act, despite their congressional majority. The inclusion of sections regarding the rights of fetuses and a repeal of the Johnson Amendment is evidence of desperate endeavors by conservative lawmakers to ensure passage of some form of major legislation that would not be able to survive on its own merit as a bill.

In terms of the socioeconomic impacts of the bill, the forecasted consequences appear just as bleak. Firstly, this legislation would target immigrant families, making it harder for them to apply for the refundable child tax credit. A harsh provision that would even apply to children born within the borders of the United States, it is expected to impact around 3 million children from working class families. Additionally, the proposed legislation would be significantly aimed at benefiting big businesses and the rich. The corporate tax rate would be lowered to around 15 percent permanently and The Washington Post has predicted that “People who make in the high hundreds of thousands of dollars a year or just over $1 million a year could see the biggest benefits”. 

Moreover, among the controversial stipulations of the tax reform are a number of provisions that will undoubtedly affect Duke and the realm of higher education if the plan is ratified unaltered. In order to balance the large amount of revenue that would be lost through the plan’s proposed corporate tax breaks, a 1.4 percent excise tax would be imposed on university endowments under the new law. Moreover, the plan also intends to end interest rate reductions for recent graduates paying off student loans while also eliminating tax benefits for a huge portion of the graduate student population. In other words, funding from the endowment would most likely be strained under the new law, forcing Duke’s administration to either make cuts to the university budget and or potentially raise the tuition higher than the current annual rate of four percent. The plan’s elimination of tax breaks for student loans would also disproportionately negatively affect Duke students of lower socioeconomic standing who receive loans as part of their financial aid.

For millions of Americans, including those here at Duke, the proposed GOP tax plan represents a legislative attack on working class families and students for the benefit of corporations and religious conservative elements that clearly stand to profit immensely from the bill. As active participants in the democratic process, we should make voices be heard by those in Washington who are currently involved with legislating and debating this bill. It is our duty, especially as Duke students dedicated to “knowledge in the service of society,” to call folly in the face of such a contemptible legislation.